JUDGMENT M. RAMACHANDRAN, J. – Petitioner is a registered dealer, engaged in manufacture of confectioneries. As job-work, they attend to production on behalf of another unit, M/s. Parrys Confectionery Ltd., who is a registered dealer at Palakkad. Raw materials and consumables are supplied by the principals, and as a consequence, the petitioner had submitted "nil" returns for past few years. The petitioner was in need of "C" forms and highlighting the request, application had been filed, in prescribed form. This was not issued. But on November 2, 2000 exhibit P3 communication has been issued by the first respondent demanding the petitioner to furnish additional security of rupees five lakhs, under section 7(3A) of the Central Sales Tax Act, 1956. It is stated that till 1993-94, they had collaboration with M/s. Parrys, that the sales tax exemption enjoyed had got exhausted during 1993-94 and the "C" forms already in possession by them had been misused for inter-State purchase. Penalty proceedings also were initiated and these circumstances justified demand for additional security amount. The objections of the petitioner were overruled and it is submitted that exhibit P5 proceedings were issued. As there was "nil" return, the petitioner submitted that the yardstick employed for calling of security was without any statutory backing. The petitioner had submitted that for the period from 1994-95 to 1999-2000, using C forms the petitioner had purchased goods worth Rs. 62,75,637.14. When such inter-State purchase is there, and there was "nil" returns, according to the department, evasion was prima facie to be inferred, and this is the reason for insisting on security, and there is no question of any harassment as alleged. The petitioner before this Court has relied on section 8(1)(b), 8(3)(b) and 8(4)(a) of the Central Sales Tax Act, 1956 which according to them, authorise them to issue "C" forms for purchase of goods in the manufacture or processing of goods for sale. Advocate Smt. K. Latha, heavily relied on the decision in Assessing Authority-cum-Excise and Taxation Officer, Gurgaon v. East India Cotton Mfg. Co. Ltd. [1981] 48 STC 239 (SC). The goods manufactured on job-work basis after receiving raw materials and packing materials are returned to M/s. Parrys who include them in their sales and sales tax is remitted to the State of Kerala. The goods purchased on the "C" forms are used by them in the manufacture of goods intended for sale. Co. Ltd. [1981] 48 STC 239 (SC). The goods manufactured on job-work basis after receiving raw materials and packing materials are returned to M/s. Parrys who include them in their sales and sales tax is remitted to the State of Kerala. The goods purchased on the "C" forms are used by them in the manufacture of goods intended for sale. Reference to exhibit P6 is made to show that the penalty order issued has been set aside, and on the self same premises, now exhibit P5 is issued, thereby undermining the sanctity of the orders passed by the superior officer. The un-workability of application of section 7(3BB) was also highlighted as the security was to be in proportion to the tax payable or leviable under the Act and the petitioner was submitting nil returns from 1994 onwards, and assessments were accepted. The counter-affidavit filed by the Assistant Commissioner, refuted the contentions of the petitioner. From 1994-95 onwards, the petitioner was not having business activities as defined under the Kerala General Sales Tax Act and Central Sales Tax Act. Therefore, the use of "C" forms can only be treated as misuse of the facility, since at the time of supply of forms, column 7 of the application showed that business as manufacturing of sweets. In the light of change in the activities, the assessee was obliged to return the unused forms. Therefore, it is submitted that security is essential, in the interests of the Revenue. In the reply affidavit, reference is made to the diversification proposed and also the requirement of machinery for expansion and spare parts consumed. These are authorised by the Memorandum of Association and there can be no objectionable feature in giving of "C" forms or using of the same. By an additional affidavit, copies of application earlier made for Central sales tax registration has been made available and it is shown that plant and machinery are items included in the list. On the materials that have forthcome, I may examine the validity and justification of the demand put up by exhibits P3 and P5. I am also necessarily invited to go into certain other issues that have come up in the course of hearing. Liability for inter-State sales tax arises on all sales in the course of inter-State trade or commerce. On the materials that have forthcome, I may examine the validity and justification of the demand put up by exhibits P3 and P5. I am also necessarily invited to go into certain other issues that have come up in the course of hearing. Liability for inter-State sales tax arises on all sales in the course of inter-State trade or commerce. Section 8 of the Central Sales Tax Act and Central Sales Tax (Registration and Turnover) Rules, by rule 12 prescribes the forms "C" and "D". Rule 11 of the Central Sales Tax (Kerala) Rules, 1957 which is relevant, may be extracted hereinbelow : "11. A registered dealer, who wishes to purchase goods from another such dealer on payment of tax at the rate applicable under the Act to sales of goods by one registered dealer to another, for the purpose specified in the purchasing dealer's certificate of registration shall obtain from the registering authority blank declaration forms prescribed under rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957 on payment of a fee at the rate of rupees twelve per book of twenty-five forms and rupees forty per book of one hundred forms for furnishing it to the selling dealer. Before furnishing the declaration to the selling dealer the purchasing dealer, or any responsible person authorised by him in his behalf, shall fill in all required particulars in the form and shall also affix his signature in the space provided in the form for this purpose. Thereafter, the counterfoil of the form shall be retained by the purchasing dealer and the other two portions marked 'Original' and 'Duplicate' shall be made over by him to the selling dealer." Sub-rules (6) and (11) provide that unused declaration forms in stock need be returned only on cancellation of his registration, or when they are notified as obsolete. A cursory reading therefore would show that a dealer who is registered, is entitled to demand for "C" forms, so long as his status as a registered dealer is undisturbed. As the petitioner has used "C" forms for purchases from outside Kerala, as seen from exhibit P10 series, section 8(1)(b) has no application to the facts. Also the issue is not the tax payable or the rate thereof, but only if there has been any misuse necessity is pointed out for security. As the petitioner has used "C" forms for purchases from outside Kerala, as seen from exhibit P10 series, section 8(1)(b) has no application to the facts. Also the issue is not the tax payable or the rate thereof, but only if there has been any misuse necessity is pointed out for security. Though section 8(1)(b) refers to sale, nevertheless it is clear that it covers purchases as well, as seen from sub-rule (3)(b). The reason pointed out by the respondent for insisting on security is that there appears to be misuse of "C" forms already supplied. Exhibit P12 is but relied on by the petitioner to show that items of machineries and spare parts were included in the application for registration. Reference is also made to exhibit P6 issued by the Deputy Commissioner, setting aside the penalty order. Under section 8(3)(b), goods of the class specified in the certificate of registration as being intended for resale by him or for use by him in the manufacture or processing of goods for sale is entitled to the concessional rate of tax. Rule 13 of the Central Sales Tax (Registration and Turnover) Rules, 1957 explain the meaning of the goods referred to in the section. It shall be goods intended for use by him as raw materials, processing materials, machinery, plant, equipment, tools, stores, spare parts, accessories, fuel, or lubricants in the manufacture or processing of goods for sales. Taking cue from section 8(3)(b) if purchase is for generation or distribution of electricity, or any other form of power, there also such benefit becomes admissible. The essential distinction from the former, as from the latter is that such goods are purchased, for manufacture or processing of goods for sale. This stipulation is not obviously there in the matter of generation or for distribution of power. Therefore, the petitioner could have claimed the benefit of user of "C" forms only if it was simultaneously possible for them to establish that the goods purchased were for processing of goods for sale. At this context, the decision of the Supreme Court comes to their aid. Assessing Authority-cum-Excise and Taxation Officer, Gurgaon v. East India Cotton Mfg. Co. Ltd. [1981] 48 STC 239 (SC). The expression is for sale, and not for sale by the manufacturer. At this context, the decision of the Supreme Court comes to their aid. Assessing Authority-cum-Excise and Taxation Officer, Gurgaon v. East India Cotton Mfg. Co. Ltd. [1981] 48 STC 239 (SC). The expression is for sale, and not for sale by the manufacturer. I may quote an excerpt from the said decision at pages 246 and 247 : "On a plain grammatical construction these words govern and qualify only 'use' and cannot be projected into the words 'for sale'. The goods purchased by the registered dealer must be used by him in the manufacture of goods which are intended for sale but such sale need not be by the registered dealer himself; it may be by anyone. ................. We are therefore of the view that the division Bench of the High Court was right in holding that even if the assessee carried out the work of sizing, bleaching and dyeing of textiles for a third party on job-contract basis, its case would be covered by the terms of the second sub-clause of section 8(3)(b), provided that the textiles so sized, bleached and dyed by the assessee were intended for sale by such third party. ................" Hence it could not be stated that there has been a misuse, and attempt for imposition of penalty may not be authorised. The next question is whether insistence for security is authorised nevertheless. The argument put forward is that under section 7(3BB) the security has to be correlated to the tax payable. Admittedly no tax was being levied as seen from the assessment orders produced. But one cannot forget the prescription made by section 7(3A). Though exhibit P5 does not specifically refer to this aspect, the submission made by the petitioner necessarily leads me to the above regions as well, since the decision will be incomplete without a discussion and decision on this point. Where "it appears necessary for an authority granting a certificate of registration for the proper realisation of tax payable or for proper custody and use of forms, he may at any time by an order in writing and for reasons recorded require the dealer to furnish security; for all or any of the aforesaid purpose." (section quoted deleting irrelevant portions). Where "it appears necessary for an authority granting a certificate of registration for the proper realisation of tax payable or for proper custody and use of forms, he may at any time by an order in writing and for reasons recorded require the dealer to furnish security; for all or any of the aforesaid purpose." (section quoted deleting irrelevant portions). I find that sub-section (3BB) deals only with some of the situations alone, and it may not be possible to read into the said clause that only in cases tax is payable, security can be insisted, and never otherwise. If this interpretation is accepted, it will be wholly ignoring the multiple contingencies spoken to by sub-section (2A) under which the application is filed and also sub-section (3A). Not only for payment of tax under the Act, but also for proper custody and use of the forms demand of security is contemplated. Viewed from this position, the demand is not objectionable. As the conduct for insistence of security is questioned, and not the quantum, I am not looking into that aspect and security could be insisted. Nevertheless, if an application is submitted to them in this regard, for reviewing the amount of security, since the statute does not prescribe a guidance to be adopted in such cases, a rethinking may be permissible. In the aforesaid view, I hold that exhibit P5 is valid and proper, and is issued with jurisdiction. The original petition is therefore dismissed. Order on C.M.P. No. 59707 of 2000 in O.P. No. 35007 of 2000P dismissed. Petition dismissed.